Fonterra chief executive Miles Hurrel said it would maintain ownership of the Kāpiti brand.

"We... will be licencing its use for ice cream to Froneri. This means our popular Kāpiti cheese isn't going anywhere."

The deal will be settled at the end of May, but a transition period of a few months is expected.

Fonterra said the sale represented a gain of about $100 million above Tip Top's book value, which would have a positive six cents per share impact on earnings.

However, it was too early to predict the impact on this financial year's earnings of the overall plan to sell parts of the business, with the sale of Fonterra's DFE Pharma division still a possibility, the co-operative said.